Research

In many settings, a person’s outcome depends not only on her own behavior, but also on her counterpart’s. Such strategic decisions have traditionally been studied using normative game theory, which assumes that people adopt equilibrium strategies and will reach the same decision, regardless of how the problem is described (framed). We examine a potentially important type of framing effect—focusing on how the relationship between players’ actions generates joint outcomes. Any strategic interaction can be described by either spelling out the outcomes of all possible action combinations (which we call “outcome framing,” or simply “O-framing”) or describing what will happen if different players choose the same action or choose different actions (which we call “relation framing,” or simply “R-framing”). O-framing has been the typical way to describe a strategic problem in prior work, whereas R-framing is commonly employed in real-life communications. We propose that these functionally equivalent frames induce different psychological processes and lead to different decisions: Relative to O-framing, R-framing increases players’ beliefs about their counterparts’ likelihood of coordinating on a cooperative option. We demonstrate this effect in the context of classic games such as the Prisoner’s Dilemma and the Stag Hunt. We find that, compared with O-framing, R-framing significantly increases people’s likelihood to choose the action that maximizes collective benefits rather than individual interests, and it does so by increasing beliefs that one’s partner will choose the same action as well. We derive conditions when this effect is likely to emerge and discuss the managerial implications of this research.

Previous research suggests that people may infer a product's quality from its audience size (i.e., the number of people who consume the product). However, this research cautions against the overuse of such inferences by identifying the mere audience-size effect: When audience size results from incidental factors (e.g., weather) and thus cannot accurately reflect product quality, people still perceive the quality of products with a large (vs. small) audience to be higher (vs. lower; Studies 1–3), leading to a misallocation of resources to these products. This effect weakens when people are prompted to compare diagnostic and nondiagnostic audience sizes (Study 4) and to deliberate on the cause of audience size before making quality judgments (Study 5). The mere audience-size effect is also less pronounced when people are familiar with a product (Study 6). The present study yields theoretical implications for overgeneralization and quality inference and practical implications for accurate resource commitment.

This paper studies a pool-choice dilemma, in which two or more resource-seekers decide independently whether to seek resources from a larger pool or a smaller pool. This dilemma mimics many real-life problems, such as firms or vendors deciding whether to enter a market with more potential buyers or one with fewer potential buyers. Across ten studies (five are incentive-compatible), we document a systematic overshooting bias, whereby the resource-seekers in the pool-choice dilemma are more likely to choose the large pool than normatively warranted, thereby sacrificing their own earnings. This research is a major extension of the prior work by Hsee et al. (2021) who found an opposite, undershooting effect in a similar dilemma. The current work offers a new look at the dilemma, with a more comprehensive theory that not only explains the overshooting effect found in this research, but also identifies its moderators and reconciles the opposite findings between this and the prior work. Contrary to what the prior work found, we predict and find that people in the dilemma generally overshoot rather than undershoot, unless they are explicitly prompted to predict the choice of their counterparts or the dilemma is framed in such a way that naturally prompts the players to consider the choice of their counterparts. This research carries theoretical implications for strategic thinking, and practical implications for resource competition.

People often judge the quality of selection decisions made by others: The CEO of a firm may judge the quality of hiring decisions made by the firm's HR personnel; the readers of a journal may judge the quality of manuscript-acceptance decisions by the journal's editor. To accurately judge others' selection decision quality, evaluators should consider not only the outcome of the selection decisions but also the constraints of the decision-maker. For example, to judge the quality of the hiring decisions made by the HR personnel, the CEO should consider not only how many high-quality (vs. low-quality) candidates the HR personnel hired, but also how many high-quality (vs. low-quality) candidates applied, and how many candidates the HR personnel needed to hire. We theorize that evaluators tend to overlook these constraints, and, consequently, judge decision-makers who faced greater constraints as having made worse decisions than decisions-makers who faced lesser constraints, even if the former's decisions were actually as good as or better than the latter's. We refer to this phenomenon as Blaming the Strawless Brickmaker (from the saying “making bricks without straw”). Eight studies, employing mixed methods, demonstrate the Blaming-the-Strawless-Brickmaker effect, examine its underlying mechanism, and suggest ways to improve the quality of judged selection decision quality.

This research explores a phenomenon that we see nearly every day and has implications for how we view people in other nations: Different media outlets may report the same international events either in terms of the nation (e.g., “Russia invades Ukraine”) or in terms of the leader (e.g., “Putin invades Ukraine”). Five studies, conducted during the 2022 Russia-Ukraine Conflict and involving both field and experimental data, find that readers of nation-framed news about the conflict had worse impressions of the people in the associated nation (Russians) than readers of the corresponding leader-framed version. We explain the psychology behind this framing effect and identify its moderators. Our research underscores the importance of responsible media practices in shaping global perceptions.

People are increasingly worried about untruthfulness in news reporting. We distinguish between two types of untruthfulness: apparent untruthfulness (containing false information) and consequential untruthfulness (giving readers a wrong impression of the truth). Consequential untruthfulness can be caused by both the presence of false information and cherry-picking (reporting only parts of the truth). Despite this, we find that people's perception of untruthfulness depends largely on apparent untruthfulness. Consequently, they treat news that cherry-picks information less negatively (e.g., less likely to criticize it and more likely to share it with others) than they treat news that contains false information, when the former is more consequentially untruthful than the latter. We dub this phenomenon as cherry-picking tolerance. We also find that prompting people to think about the consequence of the news report (i.e., the impressions people form after they read the news reports) will mitigate the cherry-picking tolerance. This research draws attention to the widespread practice of cherry-picking in news reporting and calls for a new look at what constitutes fake news.

Imagine you are a real estate agent and are showing a prospective buyer a house with a lake view, but it is foggy, and the view is less than ideal. Are you inclined to tell the prospective buyer, “Unfortunately, it is foggy outside. If it were not foggy, the view would be even better!”? Eight studies, spanning diverse domains, reveal a novel discrepancy: most presenters (e.g., the seller) choose to communicate such upward counterfactual information (UCI) to experiencers (e.g., the prospective buyer), believing it will enhance experiencers’ impressions (e.g., of the house)—yet UCI actually worsens their impressions. This discrepancy arises because presenters insufficiently account for the fact that they possess more knowledge about the presented target than experiencers do; they fail to realize that noting an imperfection reveals it. Accordingly, when experiencers are knowledgeable about the target, either because the imperfection is obvious or because they can easily envision the upward counterfactual, the discrepancy attenuates. Finally, the presenter–experiencer discrepancy occurs only when the counterfactual information is upward, such that presenters do not overcommunicate downward counterfactual information, which rules out a desire to share any information as an alternative mechanism for presenters’ communication decisions. Together, this research highlights the prevalence and costs of sharing UCI.

Many real-life examples-from interpersonal rivalries to international conflicts-suggest that people actively engage in competitive behavior even when it is negative sum (benefiting the self at a greater cost to others). This often leads to loss spirals where everyone-including the winner-ends up losing. Our research seeks to understand the psychology of such negative-sum competition in a controlled setting. To do so, we introduce an experimental paradigm in which paired participants have the option to repeatedly perform a behavior that causes a relatively small gain for the self and a larger loss to the other. Although they have the freedom not to engage in the behavior, most participants actively do so and incur substantial losses. We propose that an important reason behind the phenomena is shallow thinking-focusing on the immediate benefit to the self while overlooking the downstream consequences of how the behavior will influence their counterparts' actions. In support of the proposition, we find that participants are less likely to engage in negative-sum behavior, if they are advised to consider the downstream consequences of their actions, or if they are put in a less frenzied decision environment, which facilitates deeper thinking (acting in discrete vs. continuous time). We discuss how our results differ from prior findings and the implications of our research for mitigating negative-sum competition and loss spirals in real life.

In judgment and choice, consumers show a variety of biases, from the sunk cost fallacy and projection bias to usage frequency neglect and erroneous price–quality inferences. This article explains these seemingly disparate biases and predicts new biases using an overarching framework based on the relevance insensitivity theory proposed by Hsee et al. (2019). According to the theory, many biases arise because people are insufficiently sensitive to the relevance (i.e., weight) of a cue variable to the target variable (the dependent variable). The direction of the bias depends on the normative relevance of the cue—people over-rely on the cue when it is normatively irrelevant and under-rely on the cue when it is normatively highly relevant. We show that ostensibly unique and universal biases are neither unique nor universal: All are manifestations of relevance insensitivity, and each bias attenuates or reverses as the cue variable's relevance changes.

Discrimination is not only an objective fact but also a subjective judgment. While extensive research has studied discrimination as an objective fact, we study the judgment of discrimination and show that it is malleable while holding objective discrimination constant. We focus on a common situation in real life: the constituent groups in a candidate pool are unequal (e.g., fewer female candidates than male candidates for tech jobs), and observers (e.g., the public) see only one side of the decision outcome (e.g., only the hired applicants, not the rejected ones). Ten experiments reveal a framing effect: people judge the decision-maker (e.g., the tech firm) as more discriminatory against the minority in the candidate pool if people see the composition of the accepted candidates than if they see the composition of the rejected candidates, even though the information in the two frames is equivalent (i.e., knowing the information in one frame is sufficient to infer the information in the other). The framing effect occurs regardless of whether the decision-maker is objectively discriminatory, replicates across diverse samples (Americans, Asians, and Europeans) and types of discrimination (e.g., gender, race, political orientation), and has significant behavioral consequences. We theorize and show that the framing effect arises because, when judging discrimination, people overlook information that they could infer but is not explicitly given, and they expect equality in the composition of the constituent groups in their given frame. This research highlights the fallibility of judged discrimination and suggests interventions to reduce biases and increase accuracy.

That wealth has diminishing marginal utility is a fact of life, and that people be sensitive to their current level of wealth when deciding whether to pursue additional wealth is a requirement of rational choice. A series of experiments, spanning diverse contexts, reveal marginal-utility neglect—that people are rather insensitive to their current wealth when deciding how much effort to expend to acquire a monetary reward (e.g., how long to walk to claim a voucher). Moreover, the experiments demonstrate that a marginal-utility-prompting manipulation, which prompts people to consider their current wealth and their need for the reward given their current wealth, produces a significant sensitization effect—making financially richer (vs. less rich) individuals less (vs. more) willing to seek the reward. This manipulation is more effective than either prompting people to consider their current wealth alone or consider their need for the reward alone, suggesting that marginal-utility prompting does not merely draw people’s attention to their current wealth or merely draw their attention to their need for the reward, but links the two elements. This research elucidates the psychology of marginal utility and yields implications beyond the pursuit of monetary rewards.

This research studies a resource pool-choice dilemma, in which a group of resource seekers independently choose between a larger pool containing more resources and a smaller pool containing fewer resources, knowing that the resources in each pool will be divided equally among its choosers, so that the more (fewer) people choose a certain pool, the fewer (more) resources each of them will get. This setting corresponds to many real-world situations, ranging from students choosing majors as a function of job opportunities to entrepreneurs choosing markets as a function of customer bases. Ten studies reveal a systematic undershooting bias: fewer people choose the larger pool relative to both the normative equilibrium benchmark and chance (random choice), thus advantaging those who choose the larger pool and disadvantaging those who choose the smaller pool. We present evidence showing that the undershooting bias is driven by bounded rationality in strategic thinking and discuss the relationship between our paradigm and other coordination games.

We introduce the idea of deterring undesirable behaviors by raising incivility awareness—sensitivity to when one is violating norms of civil behavior. We demonstrate that this approach is effective in deterring pedestrians from crossing intersections at red lights, which is a serious worldwide safety problem. In three field experiments conducted at urban intersections (involving more than 12,000 total observations), we found that posting signs raising pedestrians’ incivility awareness significantly reduced red-light crossing rates. We also found that the incivility-awareness message of “Crossing at the red light is uncivil” made those signs more effective than signs with messages that emphasized the importance of not crossing at a red light (“Don't cross at the red light”), civil behavior (“Waiting for the green light is civil”), safety (“Waiting for the green light is good for safety”), and danger (“Crossing at the red light is bad for safety”).

Research in psychology and related fields has documented a myriad of prediction biases, such as the underprediction of hedonic adaptation and the overprediction of other people’s concern for fairness. These prediction biases are ostensibly independent, each with its own cause. We argue, however, that many of these seemingly disparate biases are specific instances of a general bias—situation insensitivity: People are insensitive to variations in the situational variable that underlies the target variable (the variable to be predicted). Consequently, when encountering a condition in which the situational variable is at one of its ends such that the value of the target variable is low, people overpredict the value; conversely, when encountering a condition in which the situational variable is at its other end such that the value of the target variable is high, people underpredict it. Most prior research documenting prediction biases has focused on only one end of the situational variable and therefore has shown either only an overprediction bias or only an underprediction bias. We argue that at the other end of the situational variable, the originally documented bias can disappear or even reverse. Our framework not only explains known biases but also predicts new biases.

We study how the temporal positions in which a disadvantaged person (e.g., an unattractive-looking customer) and an advantaged person (e.g., an attractive-looking customer) encounter an actor (e.g., a vendor) influence the treatment they get from the actor (e.g., the prices the vendor offers). Three experiments, including a field experiment and a pre-registered experiment, incorporate three types of personal attributes (physical appearance, nationality, and gender) and find both a free-riding effect for the disadvantaged person and a cost-bearing effect for the advantaged person. Specifically, the disadvantaged person receives better treatment by following the advantaged person, and the advantaged person receives worse treatment by following the disadvantaged person. These effects occur only if the attribute that differentiates the disadvantaged and advantaged persons is perceived as unjustifiable, and they disappear if the attribute is perceived as justifiable, suggesting that these effects are due not to anchoring, but to the actor’s need for justifiability. This research highlights the importance of choice architecture in discrimination and its prevention.

People hedonically adapt to most changes, but they adapt more slowly to some changes than to others. This research examines hedonic adaptation to income changes, and asks whether people adapt more slowly to social or temporal income changes. Four experiments, manipulating the actual pay rate of online workers, find that people adapt more slowly to social income changes (e.g., a decrease in others' income but not in one's own income) than to temporal income changes (e.g., an increase in everyone's income). This pattern holds for both negative changes (Experiment 1) and positive changes (Experiments 2, 3, and 4) and can be explained by a differential-consideration account (Experiment 3). These results suggest that in the short run, both temporal and social changes influence one's hedonic experience, but in the long run, what influences one's hedonic experiences is how much one earns relative to how much others earn, and not how much one earns now relative to how much one earned in the past. This research enriches the existing literature on hedonic adaptation, and on social versus temporal changes, and yields practical implications for the impact of income changes on subjective well-being over time. 

Establishing a causal relationship between state boredom and risk taking is contributory to understand the nature of boredom and its influences. This research examines how and why state boredom influences financial risk taking. Across multiple inductions of state boredom, we found that state boredom increased participants’ preference for engaging in financial risk-taking behavior (Studies 1, 2, and 3) and actual financial risk-taking behavior (Studies 2 and 4). An internal meta-analysis verified the robustness of this effect. We also assessed four potential mediators and found motivation to seek stimulation as the best explicable mediator (Studies 3 and 4). Overall, the current research signified the role of state boredom in predicting financial risk taking as a function of motivation to seek stimulation. 

Extensive existing research has studied how decisions differ between joint evaluation (JE) and single evaluation (SE), but most of the research aims to demonstrate preference reversals between two alternatives that vary on two attributes simultaneously. Thus, extant research cannot tell whether the reversal occurs because one of the attributes has a greater effect in JE than in SE, or the other attribute has a greater effect in SE than in JE, or both. Going beyond preference reversals, this research examines options that vary on only one attribute and studies whether the single attribute has a greater effect in JE or SE. We posit that any single attribute has two underlying characteristics—evaluability (i.e., whether people can evaluate a given value of the attribute without having to compare it with other values) and justifiability (i.e., whether people believe they should base their decisions on the attribute). Whether the single attribute has a greater effect in JE or SE depends on both the attribute’s evaluability and justifiability. Specifically, (a) a high-justifiability/low-evaluability attribute (e.g., whether a candidate for a programming job has written 100 or 200 programs) has a greater effect in JE than in SE, and (b) a low-justifiability/high-evaluability attribute (e.g., whether the candidate belongs to a discriminated-against minority group) has a greater effect in SE than in JE. While the first proposition has been tested in prior research on evaluability, the second has not. Four experiments, including one in a naturally-occurring setting and another with orthogonal manipulation of evaluability and justifiability, tested and supported these propositions, especially the second.

Often, laypeople motivate themselves or others to make good decisions by encouraging the decision maker to be “rational.” However, this practice could be counterproductive. Laypeople typically think that rational decisions are anti-emotional, based only on “cold” factors such as economic value, and not influenced by “hot” factors such as hedonic experience. Paradoxically, this lay notion of rationality is in stark contrast with the utilitarian notion of rationality, which maximizes overall utility, in which feelings are essential. Demonstrating this paradox, three studies found that participants who were encouraged to be rational were more likely to choose options that yielded less happiness without other benefits and therefore were less rational in the utility-maximizing sense. The research also examines boundary conditions and discusses practical implications.

When seeking out the truth about a certain aspect of the world, people frequently conduct several inquiries successively over a time span. Later inquiries usually improve upon earlier ones; thus, it is typically rational to expect the finding of a later inquiry to be closer to the truth than that of an earlier one. However, when no meaningful differences exist between earlier and later inquiries, later findings should not be considered epistemically superior. However, in these cases, people continue to regard findings from later inquiries as closer to the truth than earlier ones. In 10 experiments, when later inquiries conflicted with—but did not epistemically improve upon—earlier ones, participants’ global judgments about the truth aligned more with later findings than earlier ones, an effect referred to as progression bias. The liability to progression bias may have severe ramifications for the well-being of the society and its members.

People show systematic biases in judgment and decision making. We propose that many seemingly disparate biases reflect a common underlying mechanism—insensitivity to the relevance of some given information—and that manipulating the relevance of the information can eliminate or even reverse the original bias. We test our theory in four experiments, each focusing on a classic bias—the sunk cost fallacy, non-regressive prediction, anchoring bias, and base rate neglect, and show that people over-rely on a given piece of information when it is irrelevant, thus exhibiting one bias, and under-rely on the same piece of information when it is highly relevant, thus showing a reverse bias. For example, when a past cost is irrecoverable and hence irrelevant to future cost, people over-rely on it when making a decision for the future, thus exhibiting the classic sunk cost fallacy, but when the past cost is fully recoverable and hence highly relevant to future cost, people under-rely on it, thus showing the reverse of the sunk cost fallacy. We also find that when people are made sensitive to the relevance of the information, both the original biases and their reverse biases are attenuated. This research offers a new look at these “old” biases, suggesting that each individual bias is not general because it can be reversed, but collectively, these biases are general because they all reflect relevance insensitivity.

It is often believed that helping behaviors benefit the recipients at the expense of the performers. However, we propose that costly helping behaviors could alleviate feelings of physical burden experienced by the performers. In support of the proposal, we found in five studies that both imaginary and real helping behaviors led the performers to perceive physically challenging tasks as less demanding (Studies 1, 2, 3, 5), such as perceiving a steep mountain road as less steep (Study 2), a heavy carton as lighter (Study 4), and a long path as shorter (Study 5). These results challenge the conventional wisdom that helping behaviors always come at the cost of the helper and corroborate a growing body of literature showing that helping others could benefit the performer.